Low Unemployment and Slow Job Growth: 2024 in Review
January 15, 2025Oregon’s annual job growth was notably slow in 2024, and was highly concentrated in private health care and social assistance. Despite slowing employment gains, the state’s labor force growth rebounded. An uptick in jobless workers resulted in a slightly higher unemployment rate, although still low by historical standards. Slow job growth is expected to continue through 2025.
Slow Job Growth
In 2024, Oregon employers added 15,700 jobs (+0.8%) to nonfarm payrolls. That’s the smallest annual total nonfarm job gain in at least three decades. The only weaker years for job growth since 1990 were those with recession-related losses.
Concentrated Gains
Job growth was not only slow, it was also highly concentrated in private health care and social assistance. This one sector alone added 16,800 jobs between 2023 and 2024, a gain of 5.9%. Government added 7,200 jobs (+2.3%) in 2024. More than half of public-sector gains occurred in local government, which includes public K-12 education, community colleges, public universities, as well as city, county, and regional public services. The other services sector – which includes hair salons and auto repair shops, among others – also grew notably, adding 2,100 jobs (+3.2%) between 2023 and 2024.
These few sectors combined for a larger job gain than overall total nonfarm job growth, because some sectors of Oregon’s economy had notable job losses in 2024. They included retail trade, which lost 4,700 jobs (-2.3%) between 2023 and 2024, and manufacturing (-2,800 jobs or -1.5%). Financial activities lost 1,900 jobs, which was a decline of 1.8%. All other broad sectors of Oregon’s economy changed by less than 1,000 jobs in 2024.
Late Year Momentum
A diffusion index provides another way to look at the dispersion of employment growth. In this index, sectors with employment gains over a given time period receive a score of 100, while those with job declines are scored as 0, and sectors with unchanged employment are coded with a score of 50. The diffusion measure is the average of these scores across all sectors based on their job changes. An average score above 50 means more sectors are growing than not, while a score below 50 means more sectors lost jobs than added them.
On both a 6-month and 12-month basis, Oregon began 2024 with more sectors losing jobs than adding them. The state’s diffusion index hovered around 50 for much of 2024, then improved by year’s end. The most current diffusion index readings, as of November 2024, were 81 for the 6-month change, and 61 for the 12-month change. That means job growth became a bit more widespread across sectors of Oregon’s economy later in 2024.
Health Care Growth
Health care and social assistance accounted for three out of every five jobs added between 2023 and 2024. It consists of four main subsectors: ambulatory health care services, hospitals, residential and nursing care facilities, and social assistance. Each of these components had strong job growth between 2023 and 2024.
Within private health care and social assistance, the largest gains between 2023 and 2024 occurred in social assistance. This includes individual and family services, including those for the elderly or disabled. Social assistance also includes businesses primarily engaged in community food and housing, child day care services, and vocational rehabilitation. Oregon’s private social assistance employers added 6,100 jobs in 2024, a gain of 8.4%.
Nursing and residential care facilities, including those for the elderly, establishments providing mental health and substance use services, and other care facilities added a total of 4,100 jobs (7.8%) between 2023 and 2024. Ambulatory care services had a similar job gain in 2024, adding 4,000 jobs (+4.0%). Oregon’s private hospitals gained an annual average of 2,700 jobs in 2024, an increase of 4.5%.
Rebound in Labor Force Growth
After two years of slowing labor force gains, growth bounced back in 2024. Oregon added nearly 30,000 people to the labor force between 2023 and 2024. That was a gain of 1.4%, which was comparable to labor force gains seen in 2015 (1.5%) and 2017 (1.6%), and slightly below labor force growth of 1.8% in 2021 during the pandemic recession recovery.
Two-thirds of Oregon’s labor force gains between 2023 and 2024 were due to more employed workers. The number of Oregonians who were employed either on a company payroll, on a farm, on contract or were self-employed rose by 20,000 (+1.0%) in 2024.
Rising unemployment accounted for the remaining one-third of labor force growth. In 2024, there was an annual average of 10,000 more unemployed workers than in 2023. While that was an increase of 12.2%, unemployment in 2024 was rising from 80,500 in 2023, which was the second-lowest level of unemployment in Oregon in more than two decades. Overall unemployment remained relatively low at 90,300 in 2024, as did the state’s unemployment rate of 4.1%.
Similar Gains Expected in 2025
Looking at the year ahead, the Oregon Office of Economic Analysis (OEA) forecasts similar growth to 2024. OEA expects Oregon employers to add 20,600 jobs to nonfarm payrolls between the fourth quarters of 2024 and 2025. That’s a growth rate of 1.0%, or an average gain of about 1,700 jobs per month. This would still be slow growth by historical standards, but similar to the annual gain of 0.8% between 2023 and 2024.
The largest employment gains by the fourth quarter of 2025 are expected to occur in professional and business services (+6,800 jobs), health care and social assistance (+3,600), and leisure and hospitality (+3,100). OEA anticipates small job losses occurring in government; some areas of the manufacturing sector; financial activities; and private education services.